Let health exchange mess be a federal responsibility

What Michigan should do about the federally mandated ObamaCare exchange has been a hot topic recently. Two editorials in The Oakland Press have bemoaned the decision to let the federal government bear the responsibility for implementing the exchange in Michigan. Failing to put Michigan in charge of the exchange, failing to take control of the choices offered in Michigan was the primary reason cited for the criticism. However, many informed citizens are of the opinion that letting the federal government bear all responsibility for the exchange was an excellent decision.

Bottom line: We will have an exchange in Michigan. It is mandated by federal law. What it does, what it interfaces with, the detailed content of the four insurance plans that can be offered, the detailed qualifications to purchase any of them are all dictated in minute detail by the federal government.

It is fairly obvious that the implementation will take longer and cost more than predicted, results will be less than promised, and consumer satisfaction is likely to be very low.

Let those who created this mess own it, pay for it and bear the responsibility for the outcome. Michigan has little or nothing to say about it regardless of which ObamaCare exchange option we choose. Michigan gives up little or nothing by not participating with the federal government in implementing this poorly designed, expensive bureaucracy that is being imposed on all of us.

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This is not partisan opinion but is supported by the facts revealed as each portion of this law is unveiled. Let’s start with a simple statement from CNN Money that many readers will no doubt see as a good, brief description what the exchanges are:

“The health exchanges, which are scheduled to open their doors in 2014, will create online marketplaces where individuals and small businesses can find more affordable insurance plans.”

It that were true, nobody could possibly have any objections. Unfortunately, reality intrudes on this wishful description. A more accurate statement would be:

“The health exchanges, which are struggling to even partially meet the mandated January 1, 2014 opening date, will enforce rigorous federal controls on a very limited set of insurance choices for private purchasers only (no small business plans), while increasing individual policy costs an estimated 28% in Michigan, 32% on average nationally.”

Why the huge difference between the promise and the reality? First, the qualifier “scheduled to open” is definitely needed. The odds of the exchanges opening as scheduled with the promised features and functions is exactly zero - Health and Human Services announced on April 2 that the there will be no services offered for at least a year for small businesses (due to inept planning) .

Given the complexity and lack of definition of many aspects of the exchanges, there will almost certainly be many more deleted features and missed deadlines. Many of the needed definitions haven’t even been written yet. Costs are unknown, and guaranteed to balloon beyond any guesses currently available. With a federal exchange, those costs are the responsibility of the federal government, not Michigan taxpayers.

Second, the exchanges are an “online marketplace” in name only - a name chosen carefully to present a positive image. The reality is that the exchange is the primary vehicle for implementing the rules and regulations of ObamaCare, not a “marketplace” of open competition for insurance plans.

Any exchange, regardless of whether it is the federal, state, or partnership flavor, must follow all of the myriad rules and regulations imposed by the Congress and HHS. In 2011 those rules comprised 244 pages plus a 103 page supplement in which the word “require” appears 811 times and “must” appears 580 times. That was before HHS got serious about writing rules. A Wall Street Journal article stated “ HHS envisions the exchanges as 50 new regulatory agencies designed to let politics run health care markets, while letting Washington give orders to the states.” The belief that a State run version would give Michigan any meaningful control over products and services offered to Michigan citizens is a myth.

According to Joel Ario, the Obama administration’s first top exchange official, the role the Obama administration envisions for states is severely limited. “The idea that a state can get away from doing anything at the state level that has anything to do with interpreting and applying the Affordable Care Act — they can’t,” Ario said. “It (HHS) now permeates the regulatory arena.” A spokesman for HHS wouldn’t respond to a question about how partnerships differ from the state role in federal-run exchanges according to the recent article on Politico.

Third, even HHS has now admitted that the insurance plans offered on the exchanges will be more expensive, not less. There are many predictions of the cost increases and which demographic will be hit the hardest, but no one is now forecasting “more affordable” insurance or lower health care costs. President Obama’s sales pitch of $2,500 per year savings for a family of four was just that - a sales pitch. The independent Society of Actuaries has calculated that the average cost of individual insurance policies will increase on average 32% once ObamaCare goes into effect. The projected increase is 28% in Michigan.

Back to the bottom line: Let those who created this mess own the cost and responsibility for it.